Sappi to Sell Shares in Jiangxi Chenming to Shandong Chenming
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Sappi Ltd., South Africa, reportedly has agreed to sell its entire 34% shareholding in the Jiangxi Chenming Paper Co. in Nanchang City, Jiangxi Province, China, for $41.58 million to the Shandong Chenming Paper Holding Co.
In 2004 Sappi became part of a joint venture (JV) with Shandong Chenming and other partners to explore fine paper opportunities in China. A change in strategic focus by Sappi caused this investment to be reviewed and led to discussions with Shandong Chenming, the majority shareholder and co-founding partner of the JV. The parties have been able to reach an amicable agreement that will allow Sappi to concentrate on its strategy of investing in high growth businesses, disposing of non-core assets and reducing its debt.
Sappi CEO Ralph Boettger noted that "our joint venture in China has been of tremendous value to Sappi. We have gained a better understanding of the Chinese market as well as of manufacturing in China. We have built strong relationships with our Chinese partners and look forward to again working with them in the future. Sappi will remain active in China in particular through its release paper and chemical cellulose businesses."
The implementation of the transaction is subject to various Chinese regulatory approvals, which is expected to be achieved before Sappi's financial year end on September 30.
Sappi is a global company focused on producing chemical cellulose (dissolving pulp), paper pulp, and paper based products to its direct and indirect customer base across more than 100 countries
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